Personal loans for home improvements 'becoming more popular'

Adverse financial conditions are keeping people from moving house - leaving homeowners to fund renovations through personal loans instead.

Figures from Sainsbury's show that around 1.1 million unsecured loans were taken out in 2008, in order to partly or wholly fund home improvements.

This is a 53 per cent increase over 2007.

Last year, house prices dropped by 15 per cent and mortgage approvals numbers roughly halved, as the credit crunch pushed the economy into recession.

Steven Baillie, head of loans at Sainsbury's, said: "It is well-documented that the housing market struggled last year and our figures might suggest that people have decided to stay put and make the most of their existing homes.

"It may also suggest however that they're trying to add value to their current homes in order to get a better price for them when the property market recovers."

In all, Sainsbury's extended £11.3 billion in personal loans for home improvement purposes last year.

2009-02-18 15:55:12 © Moneyextra.com